Can Blender be used to composite HDR photos?
I think the term you're looking for is tone mapping.

In the photography world, "HDR" is used loosely to describe the entire process of shooting multiple photos at different exposures, combining them into a 32-bit image with a high dynamic range, and then tone mapping it down to an 8-bit image that you can display nicely on your 8-bit monitor.

In the 3D world, we can render 32-bit images directly and therefore don't need to go through the process of combining exposures to make an HDR image (we already have one), so we can proceed straight to tone mapping.

There is a special node just for tone mapping actually:



And with a bit of tweaking you can do this:



If you'd like to play with it, here's the original .hdr file: http://adaptivesamples.com/files/original_untonemapped.hdr - this was made by taking several bracketed photos and merging them to an HDR, but the same method applies to raw 32-bit renders.